Consideration in contracts doesn't need to be equal or fair. Courts generally don't assess its adequacy, allowing parties to make their own bargains. This freedom lets people assign their own values to what they're exchanging.

There are some exceptions where courts might look closer at consideration. If it's so inadequate it's unconscionable, or if there's undue influence or duress, a court might step in. But usually, even nominal consideration is enough to make a contract valid.

Here are the updated notes with more detail and examples following the guidelines you provided:

Adequacy and Sufficiency of Consideration

Adequacy of consideration in contracts

• Refers to fairness or equivalence of values exchanged between parties
• Courts generally do not assess whether consideration is adequate
  • Parties free to make own bargains and assign own values
• Consideration does not need equal value for contract to be enforceable
  • Valid even if one party receives much more value than other (car sold for $100 vs. $5,000 market value)
• Gross inadequacy may factor in determining unconscionability, undue influence, or duress (selling property worth $500,000 for $1)

Court inquiry into consideration

• General rule: courts do not examine adequacy of consideration
  • Parties assumed capable of assessing value of bargain themselves
• Limited exceptions:
  • Unconscionability: inadequacy so severe it shocks conscience, court may refuse to enforce (paying $10,000 for a pencil)
  • Undue influence or duress: inadequacy results from taking advantage of vulnerability or excessive pressure (threatening harm to family for signing contract)
  • Sham consideration: consideration so trivial it appears a mere pretense, court may find no real consideration (promising a single grain of rice)

Nominal consideration concept

• Small or token amount of consideration ($1, "love and affection")
• Courts generally hold nominal consideration sufficient to support contract
  • Adequacy not determined by monetary value
• Demonstrates parties' intention to be legally bound
• If used as sham to disguise gift or lack of real bargaining, may be unenforceable (parents "selling" car to child for $1)

Sufficiency of consideration analysis

1. Scenario: A sells car to B for $100, fair market value $5,000

   • Consideration likely sufficient, courts do not typically inquire into adequacy
   • Enforceable unless factors suggest unconscionability, undue influence, or duress

2. Scenario: A promises B $1,000 if B refrains from smoking for a year

   • Consideration sufficient, B providing something of value (refraining from smoking) in exchange for A's promise
   • Fact that B not paying money to A does not make consideration insufficient

3. Scenario: A promises B $1 million for B's promise to "be a good friend"

   • Consideration may be insufficient, "being a good friend" vague and difficult to enforce
   • Court might find B's promise illusory, not real consideration
   • If terms clearly defined and parties intended to be bound, nominal consideration of $1 million could be sufficient